In August 2019, as part of a larger aircraft order, AirAsia X ordered 30 Airbus A321XLR aircraft. At the time, commercial aviation around AirAsia X’s home turf, southeast Asia, was powering ahead. But a lot has changed since August 2019, and AirAsia X is in trouble. So, where does that leave the A321XLR order?
The Airbus A321XLRs are destined for AirAsia X in Malaysia
Navigating your way around AirAsia’s brands and structure can be confusing. This order was placed on behalf of AirAsia X based in Malaysia. AirAsia X is the long-haul budget arm of AirAsia. The A321XLRs have the longest flying range of any single-aisle aircraft. They would allow AirAsia X to open new routes, particularly to destinations too small for their A330s.
Last August, AirAsia CEO, Tony Fernandes, called the A321XLR the “perfect partner” for AirAsia’s long-haul ambitions.
“This is the future of our long-haul operations,” he said.
The A321XLR order remains on the Airbus order book. But AirAsia, and in particular AirAsia X, is now in a world of pain. AirAsia X lost US$73.3 million in the quarter to June 30. That followed a series of losses over preceding quarters. In a statement accompanying the June result, AirAsia said it was facing severe liquidity issues, and that they;
“Continue to seek payment deferrals and concessions from our suppliers, lessors, and lenders.”
Earlier this month, Simple Flying reported that AirAsia X was getting sued over unpaid aircraft leases. That came amid reports AirAsia X had asked many of its lessors for a payment holiday. But as one lessor said;
“(We) value our relationship with AirAsia X. However, the depth and breadth of that relationship does not extend to, say, letting the airline skip lease payments.”
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The future of AirAsia X is up in the air
Many pundits are questioning the very survival of AirAsia X. The airline moved to ground its planes earlier this year. Since then, apart from the occasional repatriation or cargo flight, the AirAsia X aircraft have stayed on the ground. In the last 24 hours, news has broken of a second round of layoffs at AirAsia X Malaysia. Hundreds of employees are set to lose their jobs.
While the travel downturn rolls on with no real signs of abating, there’s the genuine prospect AirAsia X could go out of business. This uncertainty raises questions over the future of the A321XLR order.
There are some signs of life in AirAsia’s short-haul domestic and regional operations around southeast Asia. To an extent, that’s helping prop up the long-haul AirAsia X. But the short term prospects for long-haul flying remain grim. Over half the world’s countries still have strict border controls in place. While these remain in place and passengers remain reluctant to fly long-haul, a large shadow is cast over the future of AirAsia X.
It’s a shame because the low-cost carrier helped democratize long-haul flying in the region. The nimble A321XLR would open new markets for the airline and boost tourist traffic in the region. The lower operational costs and in-built fuel efficiencies would have also helped AirAsia X’s bottom line.
Things are very much in flux at AirAsia X these days. That means the A321XLRs on order staying ordered cannot be guaranteed. But, if AirAsia X does pull through the downturn, we’ll be seeing more and more single-aisle planes on long-haul routes. As Tony Fernades says, planes like this are the future of long-haul flying. It remains a close call, but you can’t entirely write off the A321XLR’s arriving at AirAsia X yet.